Solidarity Bank Charges Report 2023: Banks offer some relief to struggling consumers
7 February 2023
The Solidarity Research Institute (SRI) today launched its Bank Charges Report for 2023. According to the latest report, it is clear that banks are under increasing pressure to make adjustments in their prices and reward programmes due to the impact of rising inflation and interest rates on consumers.
This report was compiled by looking at different forms of added value, such as reward programmes, but cost still remains a determining factor when making a choice between the different bank accounts. The report also includes a comparison between the interest rates and savings product benefits of the country’s five largest banks, as well as that of online banks such as TymeBank and Bank Zero.
Theuns du Buisson, economic researcher at the SRI, explains: “It is clear that banks’ added value offers have been adapted to the struggling economy and consequently the struggling consumer. Online banks such as TymeBank, for example, offer a 7% interest rate for consumers who use this banks’ savings products, and this can even be increased to 8% if you have your salary deposited into a TymeBank account.”
In addition, the SRI is of the opinion that online banks offer the best value by far, especially for clients who have no need for cash transactions or physical branches. Banks such as Bank Zero and TymeBank offer certain accounts for which the cost of 14 online transactions is less than half the cost at some of the traditional banks.
In terms of what the average middle-class consumer can expect, Du Buisson believes that flagship accounts such as those marketed to consumers in this income group offer the most value. For example, a loyalty programme with varying levels of benefits is included in all these accounts, except in Capitec’s offer. Interestingly, the Capitec offer would have been the winner in this section of the consumer market, as well as in the low-income section, if it was solely based on the total cost of a bank account. However, the other banks’ added value, such as loyalty programmes, ensure that FNB’s Fusion Aspire account offers the best value for money for middle-class consumers.”
Sophisticated banking needs are also embraced in the added value offers of all the major banks. In this section, as in the previous ones, FNB reigns supreme. The FNB Fusion Premier account is only slightly cheaper than the Absa Premium Package, but due to the number of free transactions an FNB customer can make, including airtime purchases, it offers the best value for money. Absa takes second place in this section, for that very reason.
“In terms of the cheapest accounts on offer, Absa has made these types of accounts eligible for its reward programmes this year. The account that offers the most free transactions is indeed an FNB account. This extensive list of free transactions places that account comfortably in first place, with ABSA’s Transact account, last year’s winner, in second place,” Du Buisson continued.
“While consumers’ wallets are reeling under the pressure of increased interest rates and inflation, banks are adjusting their value added offer to ensure they remain competitive. This competition ensures that banks, especially in times of economic pressure, try to compete with each other in terms of favourability and value added offers. Although accounts at online banks remain cheap, it is the additional offers from major banks that make a difference to where consumers should look for what really fits their pockets,” Du Buisson concluded.
To view the complete report, click here.
Issued by Theuns du Buisson, Economic Researcher: Solidarity Research Institute (SRI), 7 February 2023
